Geithner: U.S. Government to increase the debt limit around the corner

U.S. Treasury Secretary Timothy - Geithner (Timothy Geithner) said on Thursday, the U.S. government may be touched before March 31 the legal limit debt capacity. He pointed out that unless Congress raised the cap on this before, or face serious consequences.

Geithner today sent a letter to Senate Democratic leader Harry Nevada members of Congress - Reid (Harry Reid), said: "Even a short-term or limited to breach of contract will result in disastrous economic consequences, which will continue to dozens of serious consequences years time. "

Geithner said in the letter, it is difficult to determine exactly when the U.S. government will reach 14.3 trillion in the legal debt limit, but he urged Congress to take action before the end of the first quarter, in order to avoid the U.S. government into default risk.

In a press conference held later, the U.S. Treasury Department, an official urged Congress to do is to develop a new budget plan preparation, but also do face problems related to government expenditure of intense debate preparation, do not with the debt ceiling limit government spending to make the issue more confused together.

The anonymity of the Ministry of Finance officials expressed confidence that Congress will raise the debt ceiling, if only because they do not do so would have a very destructive consequences. The official said: "Our view is that it needs to be done, but also will be done." The official also said the Treasury believe that Congress will "take responsible measures" to raise the debt ceiling so that the U.S. government to continue borrowing to raise funds for the daily affairs.

The current debt ceiling is the U.S. government in February last year, has just been approved, although the cap will be broken when the exact time is still not determined, but the Ministry of Finance said it is urgent. Geithner wrote today: "Treasury now expects the government debt ceiling as early as March 31 was hit in the March 31 to May 16 between the most likely to be touched."

Geithner said the Treasury may take special measures, such as suspension of the federal government issued bonds and local government bonds, debt ceiling will be hit to the time delay, "a few weeks." But he also said the Treasury does not want to do so.

Geithner said: "Once such measures are taken, then there is no other legitimate and prudent measures for the current debt ceiling to create more buffer space, the United States will therefore begin to face the risk of debt default." He further pointed out that If that situation into a debt default, the U.S. economy will face consequences "than in 2008 and 2009, the impact of the financial crisis much more serious."